Surviving (and Thriving!) in a Globalizing World
Surviving and Thriving in a Globalized World
Jun 30, 2015
Your business is radically changing: In 1990, only one-third of S&P 500 revenue came from outside the United States; today it is half. By 2025, more than two-thirds of revenue will be international. During the past 40 years, developed countries’ economic dependencies on the rest of the world have shifted to sales and consumption. Ninety-five percent of the world’s consumers live outside the U.S., causing businesses to place a premium on globally savvy employees. While globalization yields significant challenges, it also offers potential for incredible reward. Leaders must position their organizations to leverage these opportunities. Expecting to hire foreign-born talent is unrealistic, especially in light of the current reverse brain drain. Are you ready?
Pete Rumpel, Vice President, Institutional Markets, Rosetta Stone Ltd.
Pete Rumpel, Vice President, Institutional Markets, Rosetta Stone Ltd.
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Surviving (and Thriving!) in a Globalizing World
Globalization
In 1990, only 1/3rd of S&P 500 Revenues
Came from OUTSIDE the U.S.
Today
It’s HALF
by 2025, over 2/3rd Of Revenue
will be INTERNATIONAL
Are YOU
ready?
Is YOUR
organization?
Phase 1
Raw materials from abroad
Phase 2
Manufacturing Inputs from
Abroad
Phase 3
Innovation and R&D from Abroad
Phase 4
Sales Generated from Abroad
1970s 1980s 1990s 2000s and Beyond
Developed Countries’ Economic Dependency on the Rest of the World
Think these trends don’t affect you?
Think again.
Fact:
American companies increasingly look to foreign talent pools to gain competitive advantage in a globalizing world.
There is a Business-driven Shift in Recruiters’ Focus on Languages:
As fortunes are increasingly tied to global sales…
Foreign Sales’ Growing Weight Sales Abroad per $1 of Domestic Sales, S&P 500 Companies
$0.64$0.75
$0.87
$1.06
$1.31
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Globalizations’ Impact on Profitability % of Executives Expecting Positive Impact, 2010
Increasingly Global Markets for Labor and Talent
Shift of Economic Activity Between and Within Regions
Growth of Consumers in Emerging Economies 64%
51%
50%
…American companies naturally emphasize multilingualism in their recruiting efforts.
U.S. Recruiters’ Hiring Preferences Q2 2010
33%
50%
Will be hiring bilinguals Will prefer a bilingual over a non-bilingual, all else equal
Coupled with a Widening Skills Gap:
While American children face diminishing and limited access to foreign languages at school…
U.S. Public Schools with Foreign Language Programs 1997 vs. 2008
24%
75%
15%
58%
Elementary Schools Middle Schools
1997 2008
Languages Most Frequently Offered at U.S. Secondary Schools 2008
93%
46%
14% 13% 4% 4% 3% 0.6% 0.3%
Spa
nis
h
Fren
ch
Ger
ma
n Latin
Chi
nes
e
Italia
n
Japa
nese
Ara
bic
Rus
sia
n
A “dead” language is offered more often than
languages spoken in markets that are major U.S. trading partners.
…their European counterparts graduate from school speaking at least one foreign language.
Language Learning Among Upper Secondary European Students EU Average, 2007
2+ Languages
60%
1 Language
33%
No languages
6%
Forces Increased Talent from Abroad:
Recognizing the wide gaps in language proficiency between American workers and their foreign counterparts…
Proficiency in Foreign Languages Beyond Beginner Level % of Active Language Learners, 2007
23%
33% 33% 40% 42%
54%
45% 47%
57%
vs. vs.
...many companies look to poach talent from abroad…
Growth in Number of Foreign Workers H1B Visa Petitions by Top 1000 Employers of Foreign Workers
99,426
143,769
2005 2008
3-Year CAGR = 13%
4
14
2000 2010
….even at the CEO level.
Foreign-born CEOs Fortune 100 Companies, 2000 vs. 2010
Fact:
Fulfilling multicultural and multilingual business needs exclusively through hiring foreign-born talent is not sustainable.
The Lure of Fast-growth Developing Countries:
The staggering pace of business activity in parts of the developing world…
Real GDP Growth USA vs.BRIC Countries, 2000 through 2009
1.88%
3.31%
5.30%
7.01%
9.91%
USA Brazil Russia India China
vs.
Change in M&A Activity Q1 2010 over Q1 2009
USA -11%
Europe -3%
Asia-Pacific (incl. Japan)
79%
Asia-Pacific (excl. Japan)
126%
…coupled with the arbitraging effect of lower cost of living in these countries…
The Illusory Wage Gap Average Salary for 5-9 Years of Experience, 2010 Duty
…presents lucrative opportunities for professional development and career advancement.
Returnees’ Careers on Steroids % of Returnees Holding Senior Management Jobs, 2008 Data
Reverse Brain Drain Further Exacerbates the challenge:
The promise of a brighter future abroad...
Positive Outlook on Future Economy % of Immigrants Studying in the U.S.,2008 Data
…and governments’ efforts to lure talent back home...
Concerted Global Recruitment Efforts Case in Point: China
Special chapter on Human Resource Development in 5-year Plan “One Thousand Talents Scheme” to recruit global academic and managerial talent.
$150,000 one-time subsidy for high-potential employees moving to work in China. Special service to help foreign professionals handle immigration paperwork and get settled.
...are starting to crowd American recruiters out of the labor market for international, high-potential talent.
MBAs Taking Jobs in Asia % of Graduates from Top 10 U.S. Business Schools
Serious Competition from Foreign Recruiters Case in Point: Samsung in 2009
50 non-Korean MBAs from top 10 U.S. business schools signed for Samsung’s Global Strategy Group (100% year-over-year increase).
16 graduates hired from Kellogg alone – more than the combined number of graduates hired by U.S. giants Proctor & Gamble and General Mills. Jobs offer early opportunity to advise top Samsung executives on internal consulting projects.
Cumbersome and Uncertain Processes add to the Challenge:
Current U.S. Immigration quotas that accommodate only a portion of yearly work authorization cases…
Supply-Demand Imbalances 2008 Work Authorization Applications Situation
163,000 H1-B applicants
BUT
85,000 Annual cap on new H1-B visas
1 Day Available visas ran
out on the day after the
application process started.
+ Random Lottery Lucky applicants
selected through a random computer
lottery.
78,000 Foreign-born, highly skilled workers that
could not be hired by American companies due to lack of available visas.
Fact: American companies seek to develop linguistic awareness amongst their employees through offering language training support.
Multilingualism is now a Critical Component of Employees’ Skill Set:
Companies increasingly consider foreign language proficiency a critical part of their employees’ skill set…
Importance of Speaking a Foreign Language 2009 Data
…and many have already started offering subsidized or free training opportunities to their personnel.
Provision of Language Training 2009 Data
Look into the Near Future:
Companies that consider foreign language proficiency important but do not currently offer language training often compensate for the skills gap by hiring already multilingual staff…
Top 3 Reasons for Not Offering Language Training Support 2009 Data
36%
…however, as they face increasing difficulties recruiting international talent, language training increases.
Anticipated Near-term Changes in Corporate Language Training % of Companies Expecting Increases, 2009 Data
Fact: Innovative technology can be leveraged to deliver effective, scalable language training across an organization.
A platform approach that is engaging, effective, and easy-to-implement is the answer:
Technology-based platforms offer scale...
Foundational Language Learning Platform
REACH
Foundational Learning
Operational Proficiency
Expert Fluency
Linguist
...measurability, and value.
Foundational Language Learning Platform
REACH
Foundational Learning
Operational Proficiency
Expert Fluency
Linguist
INVESTMENT
• The ideal platform offers: – Language breadth – Management platform/
LMS integration – Scalability/accessibility – Motivation and learner
engagement – Effectiveness
Rosetta Stone Enterprise TOTALe™ a Robust E3 Language-Learning Platform:
The Ideal Platform Delivers the Right Content in the Right Way…
No translation Adaptive RecallTM
Adjusts to user needs Audio CompanionTM
Response to user action Speech, text, click Models correct way Real-time applicable
Patterned input Helps discover meaning Thought and play Keeps users motivated
Proprietary technology Emphasizes interaction Helps develops skills Builds confidence
Most natural method Simulated dialogues Native-speaking coaches Connect with other users
Intelligent Sequencing
Actionable Feedback
Natural Discovery Speech Activation Native Socialization
Rosetta Stone Enterprise TOTALe
RosettaCOURSE™
RosettaSTUDIO™
RosettaWORLD™
Fact: Rosetta Stone delivers award-winning enterprise language-learning platforms that develop the language advantage for thousands of organizations all over the world.
Recognized Effectiveness:
Outstanding Reviews, Trade Recognitions, and Academic Validation…
Outstanding Reviews
“Gold standard.” “Next best thing to living in a country.”
“A thousand times more engaging than audio tapes.”
“Unrivaled.”
Trade Recognitions
Academic Validation
Independent 2009 study:
95% confidence that average user will meet requirements of full semester in college after 55 hours of using Rosetta Stone.
Embraced by Organizations Worldwide:
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